We outline the challenges facing Turkey’s business leaders, through the lens of key indicators and cases, and the eyes of Amrop Partner Yeșim Toduk, whose two books exploring the changing face of business leadership in Turkey have received considerable attention in the country.

Turkey - a New Economic Giant?

Jim O’Neill, the former Goldman Sachs Chairman who coined the term ‘BRIC’, now presents ‘MINT’ (including Turkey) as the acronym for the “next economic giants.” In a recent BBC series, he depicted Turkey as more than the traditional ‘bridge between East and West’ – it is a hub for all compass points.

Turkey Presses On With Reform and Growth.

Turkey’s economic revival in the 1980’s is attributed by KPMG to 3 factors: a shift from agriculture to industry and services, modernizing industry and technology, and international trade and competition. Economic restructuring has seen a more liberal policy, with growth largely driven by private investments, spurred by the liberalization of capital movements and foreign capital. A stepped-up incentive regime is supporting investments in technology, R&D and design. In 2012 the new Turkish Commercial Code further formalized corporate structures. As financial markets increasingly internationalize and Turkey intensifies relationships with foreign partners, 2013 saw legislation to step up accounting standards and align with international norms. Tax law has also seen reform over 10 years. Between 2000 and 2014, Turkey’s USD per capita trebled. After an annual 10-year average in real GDP growth of 5% to 2013, the World Bank forecasted 3% growth in 2015 for Turkey (against a Europe/Central Asian backdrop of 1.8%).

Two Global Competitiveness Surveys Give Clear Signposts to Business Leaders.

Data from the World Economic Forum (WEF) and IMD, a top-ranking business school in Switzerland, signal that Turkey’s talent pool has some enviable qualities. It is relatively flexible, adaptive, technologically-connected, led by credible managers. Yet there is ground to cover in training and development, and attraction and retention mechanisms need to transcend compensation and remuneration. Value systems and business ethics deserve attention too. Still, Turkey is holding onto its brightest and best - it is not the highest source of brain drain. And, if not (yet) an innovation leader, it has positives not only in terms of flexibility and adaptivity, but in R&D spend and entrepreneurship. To raise Turkey’s image abroad (also as a destination for inbound talent), its many positive stories deserve to be told - and heard.

Turkey Has Some way to Go as a Nursery for Globalizers.

Despite success stories from dynamic flagships such as Yildiz, four Turkish companies featured on the 2014 BCG list of ‘Global Challengers’. Yet challengers are needed everywhere. In 2015, BCG reported that public companies traded in the US have a 1-in-3 chance of failing over the next 5 years. A fast-developing economy, Turkey has a big role to play.

Turkey’s Managers Put Operations Before People.

In 2012 Towers Watson surveyed 32,000 employees of mid- and large-size companies in 29 regions (750 from Turkey). If employees considered their Turkish managers to be operationally competent, only 36% said they were finding time for people management. Similarly low numbers of people reported feedback for a good job.

Introducing a New Model for Turkey’s Leaders For What’s Next.

In her 2004 book, Turkey’s Real Leadership Map, Dr. Yeșim Toduk, Managing Partner of Amrop Turkey, introduced a new model for the country’s organizational pilots: the Leadership Prism[1]. It highlighted the need to build followership based on a compelling vision and a highly-engaged team. Two factors were emphasized: open communication and an environment of trust. 10 years on, Yeşim Toduk further developed her 2004 model, explaining: “We have entered a new era of transformation, speed and agility. Turkish organizations are now looking for equally transformative ‘New Era Leaders’.” Based upon questioning and analyzing the events of the last decade in Turkey, Yeşim Toduk’s New Leadership Model describes a different kind of leader with a specific set of competencies to drive today’s business world through to 2023 (the centennial year of modern Turkey). Maintaining the importance of vision, the new model emphasizes that only via the systematic participation of all stakeholders can any vision generate buy-in and loyalty. Equally critical is network-building – forging strong relationships with internal and external organizations. Maintaining the trust environment remains at the core of this new open system.[2]

What factors made the shift happen? In the last decade, Turkey saw the birth of multiple new companies and the dawning of its digital era – with new technologies pushing leadership towards a participative style. Generation Y joined the workforce. These factors are compounded by the unique provenance and culture of Turkish companies.

There Are 4 Non-negotiables for Turkey’s Leaders For What’s Next.

In this phase of rapid, particularly digital, acceleration, Turkey’s forward-looking leader must seek and process feedback 24/7 to take his or her bearings and navigate, communicating interactively with thousands of (increasingly diverse) employees and stakeholders. Those employees are monitoring a leader’s behaviors around the clock, digitally reporting on what s/he says and does. The digital era is quite simply changing the rules of leadership. 4 competencies will make a difference over the next 10 years, says Yeșim Toduk:

Entrepreneurship and Innovation. For entrepreneurs who do not just want to endure in the digital era, but make a difference, ‘being innovative’ is not enough. Disruption is key; creating new network platforms, business models and markets, dislodging what exists - including established market leaders and alliances.

Digital Capabilities. ‘Digital’ is far more than a new channel. It is a new era, ushering in a new way of thinking, bringing its own leadership method in its wake. This implies superlative deployment of digital technologies to build and lead business networks.

Strong Networks and Cooperation. Global advantage in the digital era will be maintained not within a competitive red ocean, but a collaborative ecosystem. Leaders must establish and drive strong networks for ‘win-win’ results. Yeşim Toduk underlines 360o networking - open communication with employees, shareholders, the market, competitors and beyond to the entire stakeholder ecosystem. Only then can a leader transform the landscape and be seen as a leader in the eyes of others.

Participative Commitment with Vision. With the rise of Turkey’s Risk-Taker and Challenger Generation, the classic definition of leadership is now obsolete, says Yeşim Toduk. The ‘one man show’ is no longer accepted. The New Era Leader has to include all stakeholders in the decision-making process, starting from point zero: the vision. Turkey’s Generation Y, in particular, will likely reject any form of authority that qualifies itself on the basis of inheritance, position, status, or engages in dubious moral practices such as croneyism or nepotism. Nothing symbolized this sprit more powerfully than the May 2013 Gezi protest movement. To garner respect, authority must be earned, and even then the leader can expect only fluctuating loyalty. In short, Turkey’s Generation Y’ers, if overlooked, will never follow a vision - or a leader. They need to feel fully engaged in his or her ‘team.’

Individualization is the Name of the Game

Given these four factors, ‘individualization’ is - and will be - central for a Turkish leader to be recognized as such. It means understanding an employee’s personal contribution and leading, motivating and rewarding him or her accordingly.

With the ease of accessibility to information and Generation Y’s rising occupancy of the business landscape, traditional motivation tools have lost their bite, says Yeşim Toduk. Generation Y (and soon Generation Z) will be a force to reckon with. Solution-oriented, mobile, physically and digitally dynamic, their demand is open and it is strident: recognition. This means being evaluated and rewarded not purely on the basis of classic grading systems or bonus structures, but on being able to clearly see their own contribution themselves - and on having that contribution recognized by others.

So the New Era Leader must observe, follow up, and give feedback to his/her team on a continuous basis, rewarding people on the basis of accurate and timely knowledge of their individual contribution – to their role, to their team, and, above all, to the value creation of the organization as a whole.

[1]Derived from interviews with 3.000 directors conducted 1996-2004 and placing 500 top managers, supplemented by interviews with 100 new leaders. See the Appendix of the full article for the two models.

[2]Examining individuals and institutions, Bahçeşehir University’s ‘Values Survey’ reveals that, even if things are slowly improving, Turkey still has one of the world’s lowest levels of interpersonal trust.